Bank of England governor: don't blame foreign workers for weak productivity - live updates

The Guardian World News|Graeme Wearden

Rolling business and financial news, including Bank of England governor Mark Carney on the Today Programme and Greece’s negotiations with creditors

• Latest: Carney dampens down fears over foreign workers
• EU referendum should happen ‘as soon as necessary’
• Greek negotiations continue today
• The Agenda: Mark Carney and Mario Draghi speaking
• Carney’s migration comments make headlines

9.16am BST

Yanis Varoufakis, the embattled Greek finance minister, has just sparked fresh speculation over his future.

"As finance min I refuse to put my signature to a package .. if it proves mathematically that it doesn't add up," says #YanisVaroufakis

9.08am BST

Over in Athens, Greece’s finance minister Yanis Varoufakis is addressing a conference organised by the Economist.
Helena Smith reports:
In a speech that is likely to be dominated by a Q & A session, the Greek finance minister started out saying that “if Greece doesn’t reform it will sink” after explaining why the ongoing negotiations were “so marathon.”
“We all agree that Greece should not suffer the indignity of [excessive primary surpluses].”

9.05am BST

And here’s exactly what Mark Carney said about the risks that uncertainty over the EU referendum poses, via ITV News.
We talk to a lot of bosses and there has been an awareness of some of this political uncertainty - whether because of the election or because of the referendum.
What they’ve been telling us, and we see it in the statistics, is they have not yet acted on that uncertainty - or to put it another way, they are continuing to invest, they are continuing to hire.

Mark Carney: EU in-out referendum 'should happen as soon as necessary' http://t.co/3xbkGVg8RY pic.twitter.com/AsteRFlCPD

8.58am BST

Mark Carney has done his best to take the string out of today’s Daily Mail front page splash, saying he blamed foreign workers for “dragging down wages”
As he explained, at some length, to John Humphrys, net migration is only one factor in the complicated puzzle of why UK productivity has been so weak.

Carney still irritatingly (for journalists) unrattleable and on-message. Dampening only vaguely controversial comment(on migration)from yday

Humphrys immigrant shaming on #r4today as he talks to Mark Carney who is himself an immigrant.

Anyone remember forward guidance? Carney's language on the path of rates now firmly back in the King-era. #r4today

“It’s in the interests of everybody that there is clarity about the process and the question and the decision...
The government has made it clear that it is a priority. I am sure the government will act with appropriate speed in developing the negotiations.”

Mark Carney gets within a fag paper's width of calling for a referendum sooner rather than later on #r4today

8.34am BST

Mark Carney also cautions against assuming that the UK economy recovery will be smooth and simple.
We face a weak global economy, the impact of fiscal consolidation [George Osborne’s deficit reduction plans], and the challenge of completing the repair of the financial system.

8.33am BST

The next interest move will probably be up, Carney adds, and it’s “possible” that rates will be higher in a year’s time.

8.30am BST

Onto general economic issue, and Carney says that interest rates will rise in a gradual manner, when the time comes....

8.30am BST

Is the Bank of England worried that a referendum on Britain’s membership of the EU will cause uncertainty and hit business confidence?
The Bank doesn’t believe that businesses have yet acted on the uncertainty.

Mark Carney wants an EU referendum "as soon as necessary". Presumably some sort of Canadian idiom. #r4today

8.26am BST

As businesses run out of labour, productivity should go up, says Carney.
But you’ve been predicting a rise in productivity for years...

8.20am BST

But there are 4.8m foreign workers in the economy, isn’t that pushing down wages and productivity, asks Humphrys.
Mark Carney explains that foreign workers usually enter the labour market in jobs which are below their skill set. Over time, they rise up through the workforce, take on more high-skilled jobs and contribute to rising productivity.

8.16am BST

Humphrys asks if foreign workers are to blame for Britain’s poor productivity growth.
“I’d really dampen that down”, Mark Carney replies.
The real story is that British people want to work more.

8.13am BST

John Humphrys asks if it’s true that households would be £5000 per year, after tax, if productivity had grown at the pre-crisis rate.
Wages would be higher in the “high teens”, Carney agrees.

8.12am BST

Governor Carney is on the Today Programme now....
It is the key determinant for wages and living standards in the UK.

8.10am BST

@bankofengland Gov Carney on R4 shortly. http://t.co/e4F1F6Dvu3 inflation, interest rates and productivity. Will they ask about DOJ + fx?

8.03am BST

You can listen to the Mark Carney interview live, here.

8.02am BST

Mark Carney is likely to be quizzed about migration when he is interviewed on the Today programme in a few minutes.
Yesterday’s Bank of England Inflation Report identified net migration as one factor that has pushed down wage growth; the comment made the front page of the Daily Mail:

Thursday's Daily Mail front page - Bank chief: foreign workers drag down UK wages #tomorrowspaperstoday #bbcpapers pic.twitter.com/Z3XbOhbhJO

In recent years labour supply has expanded significantly owing to higher participation rates among older workers, a greater willingness to work longer hours and strong population growth, partly driven by higher net migration. These positive labour supply shocks have contained wage growth in the face of robust employment growth.
Wages have grown by around 2% in the past year – less than half the average rate before the global financial crisis – and a key risk is that these subdued growth rates continue.

7.56am BST

Last night’s Greek cabinet meeting focused on changes to the tax system, and possible privatisations, ahead of today’s talks with creditors today.
The Kathimerini newspaper adds:
Officials also discussed the possible timing for drafting some of these changes into legislation in a bid to show good will and convince the European Central Bank to relax liquidity restrictions on Greece.

7.53am BST

Greece’s government has instructed its negotiating team to speed up the talks with its lenders, in an attempt to bridge the gaps before it runs out of funds.
Greece’s negotiating team will continue talks with the country’s international creditors to reach a cash-for-reforms deal, a government official said after a cabinet meeting chaired by Prime Minister Alexis Tsipras.
“The cabinet authorised the negotiating team at the Brussels Group to continue talks starting on Thursday, aiming at a mutually beneficial agreement,” the official said.

Greek govt authorised team in Brussels Group to achieve 'mutually beneficial agreement'. That's it #Greece #Eurogroup

7.47am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Related: Bank of England lowers forecasts for UK

#IMF's Lagarde & #ECB's Draghi to meet in Washington today + IMF Executive Board to be briefed on #Greece by Europe Dept head Poul Thomsen .

“The bond market moves are making investors quite anxious. I think everyone expected yields to rise once we started to see a bounce in oil prices as, naturally, this would change people’s inflation outlook...
“The pace at which they’ve risen has been quite surprising, which is probably a consequence of a lack of liquidity in the market at the moment. A small change in attitude can have a much greater impact.”